IRS Publications and Rulings

Frivolous Positions

The following document, entitled “The Truth about Frivolous Tax Arguments,” is the official list of ‘specified frivolous positions’ to which IRC 6702(c) refers. Several have never really been addressed on the merits, and several are subtle misrepresentations of the truth, but they are all dead losers in a courtroom none the less. You must avoid making any argument that appears on this list.

Sample Tax Court Documents

The following documents are redacted copies of documents actually filed with the court. I have included my comments and suggestions where I thought they would be useful. Remember, these are not offered to be copied. Each case is unique as to its facts, though the errors may be similar or identical.

Petition in Notice of Deficiency Case with Answer
Petition in Frivolous Penalty Levy Case with Answer
Stipulation of Facts for Deficiency Case
Stipulation of Facts for Frivolous Penalty Levy Case

Office of Chief Counsel Bulletins

Here are a few bulletins from the IRS Office of Chief Counsel that might be of some interest to tax court petitioners. The first one below replaces the the previously published “Collections Due Process Handbook.”

By William Conklin, 30 year veteran of IRS administrative and judicial processes. An excellent analysis of the fifth Amendment as it relates to the filing of income tax returns. You cannot be compelled to waive your right against self-incrimination. How can you, then, be compelled to list possibly incriminating information on a tax return? The instructions for Form 1040 carry a clear warning that the information on the return can be shared with the U.S. Department of Justice. This is a “Miranda” warning against self-incrimination. If you have the right to remain silent, how can you be forced to testify on a tax return? Thought provoking and sane. Low risk strategies for asserting your rights.

Pleadings and Memoranda

This is an annotated and linked pdf document (52 pages) that contains the following: Petition to Quash, Government Response, Reply to the Response, Order Denying the Petition, Motion to Stay Pending Appeal, and Order Denying the Motion. The government response is completely off point, but may be of some interest for those who need to review the Powell doctrine of procedural propriety.

The orders show a stubborn unwillingness to admit what the law actually says and to admit that Title 26 is not positive law. The court doesn’t shy from ridiculous legalistic nonsense in trying to explain its corrupt order.

I’ve included comments and linked the pleadings to the citations of the code and cases.

Attorney Tommy Cryer prepared the this memorandum (109 pages) for his tax evasion case. A jury found him not guilty. I offer it with the caution that the facts of his case are probably different from the facts in yours. And the IRS is pursuing Mr. Cryer civilly for the money they claim he owes. His Tax Court case is pending as of June of 2011.

This is a single section from a brief filed in Tax Court based on IMF facts showing that the assessment of a Sec. 6702 penalty was in fact, a user fee posted to the Master File through the Non Master File, bypassing the assessment process. The Tax Court rendered a deeply corrupt and dishonest ruling in this case, misstating the petitioner’s arguments, ignoring 80 years of settled precedent concerning the Statute of Limitations, and failing to state its findings of fact and law as required by the rules.

The Tax Court Litigation Section of the Internal Revenue Manual (IRM)

The IRS guide to litigation in Tax Court for its own attorneys is called the CCDM. It is part 35 of the Internal Revenue Manual. It contains a great deal of information that will help you in preparing your case. These are your opponent’s instructions for running his case. I’ve included a link below to the opening page of the CCDM, and direct links to the ten subsections by topic.

Other Tax Court and Litigation Resources

Earlier Versions of the Code and the Statutes at Large

The 1939 code is often much more revealing of the limited scope of the income tax laws. In 1939 fewer than 5% of Americans filed income tax returns. It wasn’t until the Victory Tax of the war years that most people became aware of the income tax. The IRS would like you to believe that the Codes of 1954 and 1986 replaced the original 1939 Code. They did not. Congress indicated in both cases that the new codes did not substantially change the law. Remember, the Internal Revenue Code has not been enacted into “positive law.” That doesn’t invalidate the Code, but where there are differences between the Code language and that of the underlying Statute at Large, the Statute controls. The 1939 Code was the first attempt at codifying the internal revenue statutes going back to 1862. The language of that codification is a good deal more honest and less deceptive concerning the limited application of the law.

For all the weaslespeak surrounding the question of whether Title 26 of the U.S. Code is positive law, and for all the misunderstanding of the consequences of whether it is or not, Title 26 has not been enacted as positive law. All that means is that where the language of the Code and the underlying Statute differ, the Statute rules. It just so happens that the language of the Code often differs significantly from the original Statutes. It’s a little tricky searching the Statutes at this point because the scans are only page images. But this link will take you to where you can at least find the underlying Statutes if you know which ones you are looking for. The original income tax act dates to 1862. It is still the foundation of the Code today.

Evidence in Tax Court

Tax Court trials are supposed to be conducted under the Federal Rules of Evidence (FRE) for non-jury trials in the D.C. district. Petitioners familiar with the FRE have a great advantage over those who are not. Nevertheless, those of us who are familiar with the FRE will find that in certain types of cases, if the petitioner is too aggressive in making evidence objections, his objections will be denied regardless of their merits. Remember, the IRS has nothing but “hearsay” on which to base any allegations against you. If you properly object to it, the Court has little choice but to simply break the rules, because there is no one at the IRS with personal knowledge of your financial affairs, and the IRS is extremely reluctant to produce its employees for cross-examination.

This is a pdf of an article by Joni Larson, Associate Professor of Law, Thomas M. Cooley Law School. University of Montana, B.A. 1986, J.D. 1989; University of Florida, LL.M. in Taxation 1990. Professor Larson teaches in both the J.D. and LL.M. in Taxation programs.

Legal Research

U. of Richmond Legal Research Guide – This is a handy guide to research in a paper and ink law library. Includes a listing with links to online research sites.

Your Tax Dollar At Work

IRS Enforcement Actions in California. Prosecutor responsible for the warrantless SWAT team raid is sued by company owner. The raid is so egregious that the court allows the suit and strips the AUSA of his qualified immunity. Never at a loss, the AUSA indicts the people who sued him.